Stem Cells and Libertarianism in an Unlibertarian World

Even before this week’s veto, anger over the ban has prompted states and private philanthropists to put up their own money. They’ve committed well over $3 billion to this research in the next decade, which might be more than Washington would have provided anyway — and the federal money would have come with strings attached.

Stem-cell researchers can benefit from the freedom enjoyed by scientists who developed in vitro fertilization, which Washington also refused to finance because it was originally denounced as immoral. The absence of federal involvement sped progress by allowing unregulated private labs and clinics to innovate.

I expect a lot of people find it puzzling that (some) libertarians seem to get bent out of shape by the ban on federal funding for embryonic stem-cell research (outside a tiny number of approved lines). Aren’t libertarians supposed to be against most government science funding anyway? And if there’s one less thing to fund, shouldn’t we be happy about it even if the reason for the tightening of the federal purse strings is a bad one?

It’s intuitively appealing, but I don’t think it follows—any more than someone who doesn’t think government should run public schools ought to cheer a policy excluding certain ethnic groups from them on the grounds that it’ll keep education spending down. (It’s not actually clear the embryonic stem cell funding ban actually lowers spending anyway, as opposed to channeling it into less promising areas of inquiry.) One of the problems here is that if you look at the National Institutes of Health FAQ of stem cell funding, you find this (emphasis mine):

No federal funds may be used, either directly or indirectly, to support research on human embryonic stem cell lines that do not meet the criteria established by President Bush on August 9, 2001.

Now, NIH guidelines go on to allow a sort of mini-exception: Federal funding for “facilities and administrative costs” won’t necessarily bar an institution from doing any embryonic stem-cell research, provided the grant recipients are willing to jump through various accounting hoops. But nothing charged as a direct cost can be used to “subsidize” non-allowed research. As I read it, that means any kind of machinery or equipment acquired as part of a directly-funded project can’t later (or simultaneously, for that matter) be used for embryonic research outside those few approved lines. That leaves a lot of labs with the choice between eschewing federal funds altogether, finding separate funding to buy a lot of redundant equipment, or focusing on research programs the feds like. Now, maybe embryonic research is sufficiently promising that there are plenty of places willing to do one of the first two. But larger labs with lots of resources, especially in the academic world, are likely to find themselves pushed toward option three. So the problem isn’t just that the ban results in less direct funding for embryonic research that can be made up easily enough elsewhere, it’s that it warps the decisions of institutions by making the marginal cost of pursuing embryonic research much higher than some alternative (if less promising) project, even if both are directly funded from a private source, because the other project isn’t going to require that you purchase a bunch of new equipment to avoid repurposing stuff from other projects. The distorting effect goes well beyond having to find alternative funding for specific research. So given that we’re going to have some federal funding for scientific research, I think we should at least insist it not distort the ordinary developement of research any more than necessary.

Addendum: A scientist who, owing to his own affiliation with the government, prefers to remain nameless writes:

Your analysis of the effect of restictions of federal funds on labs that might do stem cell research is spot-on. Academic labs get built up over time through a variety of funding sources: startup money awarded to new faculty (which may come from private, state, or federal resources), contract work, and grants. It’s understood (even if not explicitly acknowledged by the NIH) that durable goods (everything from equipment down to pipettors and glassware) are going to be around beyond the funding period of the grant on which they were purchased, that some grant money will be used as “seed money” to collect preliminary data for subsequent grant submissions, and that multiple projects are usually going on in a lab and that no one “dedicates” equipment for one project only (unless necessitated due to technical requirements such as dedicated equipment for RNA work).

As such, the idea that federal money cannot directly or indirectly go to support a particular line of inquiry is not only onerous–it’s completely unrealistic. This is the biggest problem I see with the current policy.

I suspect that this complication is getting little airplay for several reasons:

1) The policy makers are completely out of touch with how labs operate.
2) The NIH doesn’t want to open this can of worms, for fear that congress might come back and demand greater accountability for where NIH money goes, and the NIH recognizes what a burden that would place on both it and researchers.
3) As a researcher working on an NIH grant, I certainly wouldn’t want that to happen, either.